Further Education Funding Council leaders accepted the process was time-consuming and expensive in a move which delighted college principals still struggling to amass detailed data using flawed software.
The statement, interpreted by some principals as an apology, was offered by FEFC chief executive Sir William Stubbs and chairman Sir Robert Gunn at the council's annual conference last week.
It recognised that the FEFC's policy of denying any serious problems have beset the Individualised Student Record (ISR) has backfired, leaving principals more frustrated than ever.
Sir Robert acknowledged introducing the ISR, which forms the basis for funding claims, had been "very taxing indeed for colleges". He added: "It has consumed scarce resources at institutions and has required a considerable amount of management attention."
But he insisted colleges' suffering had been shared by the funding council itself, which this week held a series of hastily-convened seminars to give managers a chance to voice their concerns over the computerised system.
Managing the quantity of data received and supporting colleges through the process had proved "a larger job than anticipated".
Discontent over ISR, introduced as a pilot 18 months ago, had built up to crisis point in the run-up to the conference when eight out of nine colleges failed to meet the deadline for submitting funding claims for 1994-95.
The FEFC admits the software it commissioned to allow colleges to process data miscalculates the total amount of cash they can claim.
The sympathy offensive over student records will, however, have done little to lift a conference described as "bleak" by several principals. One chief executive said later: "The energy, enthusiasm and drive which permeated FE just after incorporation have gone now, and the hatches are battened down. We are older, wiser and sadder."
Education and employment minister James Paice offered few words of comfort, telling the conference midnight had chimed for the Cinderella sector.
* Five colleges hoping to win private-sector backing for major building projects are to be put under the spotlight to allow others to learn from their experiences. The progress of South East Essex College of Technology and Arts and Stoke-on-Trent, Newbury, Liverpool and Canterbury colleges will be tracked by the FEFC as they seek cash under the Private Finance Initiative - the Government's scheme to pass the burden of capital funding from the Treasury to the private sector.